852.6363/46: Telegram
The Acting Secretary of State to the Ambassador in Spain (Hammond)
65. Referring to your telegram No. 71, July 21, 3 p.m., and your telegram No. 76, of August 6, 10 p.m.11 The following is for your information and guidance.
The oil monopoly decree of June 30 [28], 1927 has been carefully examined by the Department and the situation has been discussed informally with representatives of the Vacuum Oil Company and Standard Oil of New Jersey.
[Page 668]As you are well aware, this Government is opposed to the establishment of monopolies within the United States and of course regrets to see them created elsewhere. However, as the establishment of monopolies is generally regarded as a sovereign right, this Government could not effectively or appropriately object in principle to the creation of a Spanish oil monopoly. In case the projected petroleum monopoly should be put into effect, there is no I reason to believe that there would be any modification in the established policy of this Government with regard to the protection of American property and vested interests abroad. That policy in general, it may be stated, calls for complete and fair compensation to be made to the expropriated companies for their property losses.
Any inquiries addressed to you by Spanish officials or by representatives of the American interests involved may be answered in the light of the foregoing.
As there seems to be a certain possibility that the Spanish oilmonopoly scheme may prove to be unworkable and may not actually be put into effect, it is the opinion of the Department that any direct observations to the Spanish Government on the subject at the present time would be premature and might be misconstrued and hence tend to increase the determination of the Spanish Government to put the decree into full force.
- Neither printed.↩